[House Report 110-309]
[From the U.S. Government Publishing Office]
110th Congress Rept. 110-309
HOUSE OF REPRESENTATIVES
1st Session Part 1
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ENERGY LOAN GUARANTEE AMOUNTS
_______
August 3, 2007.--Ordered to be printed
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Mr. Dingell, from the Committee on Energy and Commerce, submitted the
following
R E P O R T
[To accompany H.R. 3241]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 3241) to clarify the amount of loans to be
guaranteed under Title XVII of the Energy Policy Act of 2005,
and for other purposes, having considered the same, report
favorably thereon without amendment and recommend that the bill
do pass.
CONTENTS
Page
Purpose and Summary.............................................. 1
Background and Need for Legislation.............................. 2
Hearings......................................................... 2
Subcommittee Consideration....................................... 3
Committee Consideration.......................................... 3
Committee Votes.................................................. 3
Committee Oversight Findings..................................... 4
Statement of General Performance Goals and Objectives............ 4
New Budget Authority, Entitlement Authority, and Tax Expenditures 4
Earmarks and Tax and Tariff Benefits............................. 4
Committee Cost Estimate.......................................... 4
Congressional Budget Office Estimate............................. 4
Federal Mandates Statement....................................... 4
Advisory Committee Statement..................................... 4
Constitutional Authority Statement............................... 5
Applicability to Legislative Branch.............................. 5
Section-by-Section Analysis of the Legislation................... 5
Changes in Existing Law Made by the Bill, as Reported............ 5
Purpose and Summary
The purpose of H.R. 3241 is to clarify the intent of
Congress regarding the implementation by the Department of
Energy (DOE) of Title XVII of the Energy Policy Act of 2005
(EPACT), ``Incentives for Innovative Technologies'', and for
other purposes.
The bill amends Title XVII to explicitly authorize the
Secretary of Energy to issue a loan guarantee for an eligible
project of up to 100 percent of any loan or other debt
obligation, at a level sufficient to attract adequate
nonguaranteed investment to capitalize an eligible project. The
bill also bars the Secretary from issuing a rule or regulation
establishing a lower percentage limit.
In addition, the bill stipulates that no appropriation
authorized pursuant to Title XVII may exclude any category of
eligible project under section 1704.
Finally, H.R. 3241 specifies that the Secretary may not
issue a loan guarantee unless the borrower has provided
reasonable assurances that wages paid to workers employed in
any construction work financed with the loan will be in
accordance with the requirements of the Davis-Bacon Act.
Background and Need for Legislation
Title XVII authorizes the Secretary of Energy to make loan
guarantees for projects that (1) avoid, reduce or sequester air
pollutants or anthropogenic emissions of greenhouse gases, and
(2) employ new or significantly improved technologies as
compared to commercial technologies in service in the United
States.
Title XVII specifies 10 categories of projects that are
eligible for loan guarantees, including renewable energy
systems, advanced fossil technology (including certain coal
gasification projects), hydrogen fuel cell technology, advanced
nuclear facilities, carbon capture and sequestration,
electrical, end-use technologies, fuel efficient vehicles,
pollution control equipment, and refiners.
On May 24, 2007, the Department of Energy (DOE) issued a
proposed rule that would limit the amount of a loan guarantee
to no more than 90 percent of the amount of a debt instrument.
(This proposal is subject to an existing statutory cap in Title
XVII limiting the amount of a loan guarantee to eighty percent
of total project cost.)
At the Subcommittee on Energy and Air Quality's April 24,
2007, hearing, several witnesses testified that if DOE adopted
an arbitrary limit on the amount of debt for which a loan
guarantee could be granted, some meritorious projects could be
foreclosed. While the Committee recognizes that not every
meritorious project will warrant funding at a level of 100
percent of the value of a debt instrument (subject to the
separate statutory limit of eighty percent of the total project
cost), it expects that some projects will require funding at
this level. For this reason, the bill bars DOE from issuing a
final rule that does not permit it to grant, on a case-by-case
basis, loan guarantees of as much as 100 percent.
In addition, the bill clarifies that any appropriation made
pursuant to the authority of Title XVII may not exclude any of
the 10 categories of projects made eligible for a loan
guarantee under section 1704 of EPACT.
Hearings
There was one oversight hearing and one legislative hearing
held by the Subcommittee on Energy and Air Quality, Committee
on Energy and Commerce, in connection with the bill reported by
the Committee.
The Subcommittee on Energy and Air Quality held a hearing
entitled, ``Implementation of EPACT 2005 Loan Guarantee
Programs by the Department of Energy,'' on Tuesday, April 24,
2007. The Subcommittee received testimony from the following
witnesses: The Honorable Dennis R. Spurgeon, Acting Under
Secretary, Department of Energy; Mr. Chris Crane, President and
Chief Nuclear Officer, Exelon Generation; Ms. Julie Jorgensen,
Co-President and CEO, Excelsior Energy Inc.; Mr. James C.
Cosgrove, Acting Director, Natural Resources and Environment,
Government Accountability Office; and Mr. Denny DeVos, Director
of Corporate Finance, POET.
The Subcommittee on Energy and Air Quality held a
legislative hearing on ``Discussion Drafts concerning Energy
Efficiency, Smart Electricity Grid, Energy Policy Act of 2005
Title XVII Loan Guarantees, and Standby Loans for Coal-to-
Liquids Projects,'' on Thursday, May 24, 2007. The Subcommittee
received testimony from the following witnesses: Mr. David
Rogers, Deputy Assistant Secretary for Energy Efficiency,
Department of Energy; Ms. Kateri Callahan, President, Alliance
to Save Energy; Mr. Jay Birnbaum, Vice President and General
Counsel, Current Group, LLC; Ms. Katharine A. Fredriksen,
Principal Deputy Assistant Secretary for Policy and
International Affairs, U.S. Department of Energy; Mr. Don
Maley, Vice President, Leucadia International Corporation; and
Dr. Daniel A. Lashof, Ph.D., Science Director, Climate Center,
Natural Resources Defense Council.
Subcommittee Consideration
Prior to the introduction of H.R. 3241, its text was
considered in the Committee as a Committee Print.
On Wednesday, June 20, 2007, the Subcommittee on Energy and
Air Quality met in open markup session and considered a
Committee Print to clarify the amount of loans to be guaranteed
under Title XVII of the Energy Policy Act of 2005. The
Subcommittee favorably forwarded the Committee Print to the
full Committee, amended, by a recorded vote of 17-12. The
Committee Print forwarded by the Subcommittee was subsequently
designated Committee Print #3 for full Committee consideration.
Committee Consideration
On Wednesday, June 27, 2007, the full Committee met in open
markup session and ordered the Committee Print favorably
reported to the House, as amended, by a voice vote. On July 31,
2007, a clean bill, H.R. 3241, was introduced with the approved
language of the Committee Print, and was referred to the full
Committee to be reported to the House without further
consideration.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. Mr.
Dingell moved that the Committee favorably report the Committee
Print, as amended, to the House. The motion to report the
Committee Print favorably to the House was agreed to by a voice
vote. There were no recorded votes taken during full Committee
consideration of the Committee Print.
Committee Oversight Findings
Regarding clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the oversight findings of the
Committee on the bill are reflected in this report.
Statement of General Performance Goals and Objectives
The goals and objectives of H.R. 3241 are to clarify the
amount of loans to be guaranteed under Title XVII of the Energy
Policy Act of 2005, and to require that recipients of these
loan guarantees provide reasonable assurances that workers will
be paid prevailing wages consistent with the Davis-Bacon Act.
New Budget Authority, Entitlement Authority, and Tax Expenditures
Regarding compliance with clause 3(c)(2) of rule XIII of
the Rules of the House of Representatives, the Committee finds
that H.R. 3241 would result in no new or increased budget
authority, entitlement authority, or tax expenditures or
revenues.
Earmarks and Tax and Tariff Benefits
Regarding compliance with clause 9 of rule XXI of the Rules
of the House of Representatives, H.R. 3241 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(d), 9(e), or 9(f) of rule XXI.
Committee Cost Estimate
The Committee will adopt as its own the cost estimate
prepared by the Director of the Congressional Budget Office
pursuant to section 402 of the Congressional Budget Act of
1974.
Congressional Budget Office Estimate
Regarding clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, a cost estimate on H.R. 3241 by the
Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974 was not available as of the
time of the filing of this report by the Committee.
Federal Mandates Statement
The Committee will adopt as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Advisory Committee Statement
Regarding section 5(b) of the Federal Advisory Committee
Act, the bill does not establish any advisory committee.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional authority for this legislation is provided in
the provisions of Article I, section 8, clause 1, that relate
to expending funds to provide for the general welfare of the
United States.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 101. Amount of loans guaranteed.--This section
amends section 1702(c) of EPACT to (1) retain the existing
statutory limit on DOE's authority to make a loan guarantee for
an eligible project (up to 80 percent of the project cost of a
facility), (2) clarify that DOE should approve an amount likely
to attract nonguaranteed investment adequate to capitalize the
project, (3) provide that while DOE has discretion to guarantee
up to 100 percent of the loan amount (subject to the existing
80 percent of project cost cap), DOE may not issue a generic
rule establishing a lower percentage limit, and (4) require
that a recipient of a loan guarantee provide reasonable
assurances that construction workers will be paid not less than
prevailing wages consistent with the Davis-Bacon Act.
Section 102. Exclusion of categories.--Provides that no
appropriation pursuant to this section may exclude any category
of ``eligible project'' under Title XVII.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
ENERGY POLICY ACT OF 2005
* * * * * * *
TITLE XVII--INCENTIVES FOR INNOVATIVE TECHNOLOGIES
* * * * * * *
SEC. 1702. TERMS AND CONDITIONS.
(a) * * *
* * * * * * *
[(c) Amount.--Unless otherwise provided by law, a guarantee
by the Secretary shall not exceed an amount equal to 80 percent
of the project cost of the facility that is the subject of the
guarantee, as estimated at the time at which the guarantee is
issued.]
(c) Amount.--
(1) Percentage of project cost.--A guarantee by the
Secretary shall not exceed an amount equal to 80
percent of the project cost of the facility that is the
subject of the guarantee, as estimated at the time at
which the guarantee is issued, and shall be no less
than the minimum amount determined by the Secretary to
be likely to attract nonguaranteed investment adequate
to capitalize the project.
(2) Percentage of loan.--Subject to paragraph (1),
the Secretary may guarantee up to 100 percent of any
loan or other debt obligation of the borrower to fund
an eligible project, and may not issue a rule or
regulation establishing a lower percentage limit.
* * * * * * *
(k) Wages.--No loan guarantee shall be made under this title
unless the borrower has provided to the Secretary reasonable
assurances that all laborers and mechanics employed by
contractors or subcontractors in the performance of
construction work financed in whole or in part with the loan
will be paid wages at rates not less than those prevailing on
similar work in the locality as determined by the Secretary of
Labor in accordance with subchapter IV of chapter 31 of title
40, United States Code (commonly referred to as the Davis-Bacon
Act).
* * * * * * *
SEC. 1704. AUTHORIZATION OF APPROPRIATIONS.
(a) * * *
* * * * * * *
(c) Exclusion of Categories.--No appropriation authorized
pursuant to this section may exclude any category of eligible
project described in section 1703.
* * * * * * *